Second Reading SpeechMr Costello (Treasurer)
That this bill be now read a second time.
This bill implements changes to various tax acts to standardise the primary eligibility criterion for the small business tax concessions. These changes will reduce the compliance costs for many Australian small businesses. They substantially simplify the tax law to make it easier for small business to determine eligibility for a number of concessions and they are part of this government's 2006-07 budget announcements:
- first, increasing the capital gains tax maximum net asset threshold from $5 million to $6 million;
- second, increasing the goods and services tax cash accounting threshold from $1 million to $2 million;
- third, extending the rollover relief available under the uniform capital allowance system to small business entities that have adopted the simplified depreciation rules.
- The current tax laws contain a number of special arrangements for smaller businesses, variously defined. In the past, there have been different threshold criteria for determining who is a small business for particular concessions. The differences, however sensible when considered individually, have been a source of complexity and unnecessary compliance costs for small businesses.
This bill amends the income tax law to create a single definition of small business, based on aggregated annual turnover of less than $2 million.
Entities that do not meet the small business entity definition can still test their eligibility for small business concessions according to existing methods for capital gains tax, fringe benefits tax and pay as you go instalments.
Full details of the measures in this bill are contained in the explanatory memorandum.
Debate (on motion by Ms Plibersek) adjourned.